Attorney General: William J. Cibes, Jr., Office of Policy and Management, 1992-004 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

February 7, 1992

William J. Cibes, Jr.
Secretary
Office of Policy and Management
80 Washington Street
Hartford, CT 06106

Dear Mr. Cibes:

You have requested our advice on two questions:

(1) Whether under Conn.Gen.Stat. 12-19a(a), a Payment in Lieu of Taxes (P.I.L.O.T.) grant is payable to a town for a correctional facility if such facility is not on the town's assessment list on the preceding October 1?

(2) Whether Public Act No. 91-79, applies to towns that conducted revaluations prior to October 1, 1990 and currently are phasing in such revaluations?

We will address these questions in the order presented.

P.I.L.O.T. grants are payments made by the state to towns for state-owned real property "on the assessment list in such town for the assessment date two years prior to the commencement of the state fiscal year in which such grant is payable." Conn.Gen.Stat. 12-19a(a). Prior to the passage of Public Act No. 88-292, the state paid P.I.L.O.T. grants in an amount equal to 20% of the property tax that would have been paid if such property were not tax exempt. The 20% rate applied to all state-owned property. Public Act No. 88-292 added the highlighted language to 12-19a(a), which is at issue in your inquiry:

(a) On or before January first, annually, the secretary of the office of policy and management shall determine the amount due, as a state grant in lieu of taxes, to each town in this state wherein state-owned real property or reservation land held in trust by the State for an Indian tribe, except that which was acquired and used for highways and bridges, but not excepting property acquired and used for highway administration or maintenance purposes, is located. The grant payable to any town under the provisions of this section in the state fiscal year commencing July 1, 1988, and each fiscal year thereafter, shall be equal to the total of (1) one hundred per cent of the property taxes which would have been paid with respect to any facility listed in subsection (w) of section 1-1 and any other facility certified by the commissioner of corrections, on or before August first of each year, to have been used for incarcerative purposes for at least six months during the preceding fiscal year and, (2) twenty per cent of the property taxes which, would have been paid with respect to all other state-owned real property, except for the exemption applicable to such property, on the assessment list in such town for the assessment date two years prior to the commencement of the state fiscal year in which such grant is payable.

Conn.Gen.Stat. 12-19a(a) (emphasis added).

The purpose of the Act was to "provide for an increase from 20% to 100% in the state payment to municipalities for tax loss on prison facilities." Conn.Sen.Proc., pt. 6, 1988 Sess.1907 (April 20, 1988) (Remarks of Sen. Harper). To accomplish that purpose, Public Act No. 88-292 amended 12-19a(a) by dividing state-owned property eligible for P.I.L.O.T. grants into two classes: (1) correctional facilities, for which towns may receive grants equal to 100% of the property tax that would have been paid if such property were not tax exempt, and (2) all other state-owned real property, for which towns may receive grants equaling 20% of the property tax that would have been paid. However, Public Act No. 88-292 did not eliminate from 12-19a(a) the basic feature of the program--that grants are payable on state-owned property " on the assessment list in such town for the assessment date two years prior to the commencement of the state fiscal year in which the grant is payable." (Emphasis added).

Your inquiry raises a question over the significance of the certification by the Commissioner of Corrections, which is due August 1 of each year. Neither the language used nor the legislative history indicates that the certification procedure was intended to create a separate time frame for payment of P.I.L.O.T. grants on state-owned correctional facilities. Rather, because not all facilities "used for incarcerative purposes" are listed in Conn.Gen.Stat. 1-1(w), the Commissioner's certification is simply a mechanism to ensure that all correctional facilities, including new correctional facilities, or facilities newly converted to correctional use, which are on the town's assessment list will be eligible for P.I.L.O.T. grants at the 100% rate, even if such facilities are not listed in 1-1(w).

Your second question concerns the applicability of Public Act No. 91-791 to municipalities currently phasing in revaluations of real property under Conn.Gen.Stat. 12-62c. Section 4 of Public Act No. 91-79 states "[t]his act shall take effect from its passage and shall be applicable to assessment years of municipalities commencing on or after October 1, 1990." You have inquired whether the foregoing language means that the act applies only to municipalities conducting revaluations that are effective on or after October 1, 1990.

The principal rule of statutory construction is that statutes must be construed to give effect to the intention of the legislature. Legislative intent must be ascertained from the words of the statute when the language is plain and unambiguous. See e.g., Rhodes v. Hartford, 201 Conn. 89, 93 (1986) and Harris Data Communications, Inc. v. Heffernan , 183 Conn. 194, 198 (1981). When construing a statute, it is inappropriate to read into it provisions not clearly stated. State ex rel. Kennedy v. Franwirth, 167 Conn. 165, 168 (1974).

In stating in Section 4 that the act applies to assessment years beginning on or after October 1, 1990, no distinction is made between municipalities that currently are phasing in their revaluations, and those that opt to do so on or after October 1, 1990. If the legislature had intended the act only to apply to municipalities conducting revaluations on or after October 1, 1990, it could have said so. Since no such distinction is made in the act we may not, by construction, add such a provision. Accordingly, it is our conclusion that the plain meaning of the words of Section 4 of Public Act No. 91-79 is that the amendments to  12-19b and 12-20b apply to municipalities currently phasing in their revaluations as well as municipalities that opt to do so in the future.

Very truly yours,

Richard Blumenthal
Attorney General

Shelagh P. McClure
Assistant Attorney General

RB/SPM/db

September 30, 1991

The Honorable Richard Blumenthal
Attorney General
55 Elm Street
Hartford, CT 06106

Dear Mr. Blumenthal:

RE: Connecticut General Statutes Section 12-19a through 12-19c Payment in Lieu of Taxes on State-Owned Real Property

We respectfully request a formal opinion on the matter of whether this agency should be paying grant monies to municipalities on newly constructed jail or prison facilities if they appear on the list of facilities certified by the Commissioner of Corrections each August 1, as having "been used for incarcerative purposes for at least six months of the preceding fiscal year ..." as provided in Section 12-19a(a).

It has been the generally accepted practice that grants are calculated and paid on facilities which appear on the M-37 "Assessors Annual Report of Assessed Value of All State-Owned Real Property on the Assessment List of 19--" claim form for each assessment year which is fixed on October first annually. It is possible for a facility to be completed and house inmates for six months of the preceding fiscal year and not be on the Grand List and M-37 form for the immediately preceding October first. We need to know if we are obligated to pay grants in that situation or if the facility goes on the next succeeding grand list and M-37 claim form and is paid on as is all other state-owned real property eligible for the grants.

The annual cycle (abbreviated) for the grant is as follows:

April 1, due date for filing M-37 Form for previous October 1. (This is not the claim on which we pay the following September, but allows us to develop more accurate budget estimates. (Section 12-19b).

August 1, Certification by Commissioner of Corrections of facilities "used for incarcerative purposes for at least six months of the preceding fiscal year." (Section 12-19a(a)).

September 30, payment of grants on October 1 Grand List of two years prior. (Section 12-19c).

The grants are paid two years in arrears. This September 30, this agency will be paying grants calculated on the October 1, 1989 Grand List. If the Commissioner of Corrections certifies a facility was housing inmates as of November or December of 1990, the facility may not appear on the M-37 form for October 1990, but would be "used for incarcerative purposes for at least six months of the preceding fiscal year." If the statute is literally interpreted in that way, it would mean that we could be paying grants on the Lists of 1989 and 1990 at the same time: 100% reimbursement on jails and prisons on the 1990 List and formula amounts on all other eligible state-owned property on the 1989 List.

It would make a very complex grant program even more complex. We would also run into a problem when we have municipalities going through revaluation: they would be using lower values and higher millrates one year and higher values and lower millrates on another, both amounts having then to be combined into one payment. In addition, phased-in revaluations, the various minimums, maximums, hold harmless amounts and differing payment "cap" percentages for net grand levy information for different years would make it almost impossible to administer. It would also accelerate the payment schedule on some facilities to the maximum rate of reimbursement a year in advance and the cost to the State of Connecticut could be substantial.

In summary, it has been our practice to process and pay grants on "the assessment list ... for the assessment date two years prior to the commencement of the state fiscal year in which such grant is payable." (Section 12-19a(a). This would place any new or converted facilities certified by the Commissioner of Corrections each August 1, on the next succeeding assessment list if it was complete and occupied by inmates after the October list date.

We would also like clarification of Public Act 91-79. Section 1 and 2 impact the payment in lieu of taxes programs on State-Owned Real Property (Section 12-19a through 12-19c) and Private Colleges and General Hospitals (Section 12-20a and 12-20b). P.A. 91-79 provides that assessments of State-Owned real property and property of private colleges and general hospitals be phased-in by any municipality adopting the provisions of Section 12-62c following revaluation. Section 4 of the public act indicates it "shall take effect from its passage and shall be applicable to assessment years of municipalities commencing on or after October 1, 1990."

Prior to the passage of P.A. 91-79, the grants were calculated on the assessed value (70% of market value), multiplied by the mill rate, multiplied by the percentage of reimbursement. In a phase-in, the new, higher revaluation values are phased-in over a period of years, requiring that the mill rate be higher than it would be if the new values (@ 70%), were implemented immediately after revaluation. Basically, they have to generate the same amount of money to run the municipality, and if the new higher values are implemented gradually, the mill rate has to be higher to generate the required funds. Previously the State was basing its calculations on the HIGHER (70%) assessment and the HIGHER (phase-in) mill rate. Calculating the grants based on phase-in values and phase-in mill rate places the grant calculations on a more equitable footing for the State of Connecticut and reduce costs to the state.

For example, if a municipality which revalued on the 1989 List implemented a phase-in of the assessments, is in its second year of the phase-in, and the assessed values of all taxable property are not at 70% but the State-owned and private college and general hospital assessments are being reported at 70%, with a higher (phase-in) mill rate, then the state would be paying grants at a higher rate than if the phase-in assessments and phase-in mill rate were used for the calculations as provided in P.A. 91-79.

Our question is whether the requirement to use phased-in assessments applies only to towns whose revaluation was effective on or after October 1, 1990, or can it be applied to those towns which have already implemented a phase-in program prior to the October 1, 1990 List and are still in some stage of their phase-in.

If you have any questions, please contact Sandy Huber or Marsha Standish at 566-8170.

Respectfully submitted,

William J. Cibes, Jr.

Secretary


1 Public Act No. 91-79 amended 12-62c(1) to extend to any municipality conducting a revaluation effective on or after October 1, 1990 the same option of phasing-in assessment increases that was given to municipalities conducting revaluations in assessment years beginning October 1, 1987, 1988 and 1989, and (2) clarified the requirement that increases be phased-in in equal increments over five years by defining equal to mean equal in terms of actual dollars or in terms of percentage of increase. Of principal concern to OPM is that portion of Public Act No. 91-79 that amends Conn.Gen.Stat. 12-19b and 12-20b to require any municipalities which opt to phase-in their revaluations and which receive P.I.L.O.T. grants for state-owned property and for private colleges and hospitals to adjust their assessed valuations of such property in accordance with 12-62c.


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